QUESTION $6$

Hello Cat Corporation has bonds with $20$ years left until maturity, with a $7\%$ annual coupon and a par value of $$1,000.$ The yield$-$to$-$maturity on these bonds is $6\mathrm{.}0\%.$ What is the current price of the bonds?

A$.$ $$1,114\mathrm{.}70$

B$.$ $$1,078\mathrm{.}37$

C$.$ $$1,043\mathrm{.}73$

D$.$ $$1,010\mathrm{.}68$

E$.$ $$979\mathrm{.}14$

F$.$ $$949\mathrm{.}03$

G$.$ $$920\mathrm{.}27$

H$.$ $$901\mathrm{.}82$

QUESTION $7$

You manage the MSB portfolio of $$30$ million. The portfolio has a beta of $1\mathrm{.}2$ and a required return of $12$ percent. MSB receives an $$12$ million additional to invest in the portfolio. You invest this new money in a

stock with a beta of $2\mathrm{.}0.$ The risk$-$free rate is $5$ percent. What is the required return on the total portfolio after the addition of new funds?

A$.12\mathrm{.}19\%$

B$.12\mathrm{.}49\%$

C$.12\mathrm{.}88\%$

D$.13\mathrm{.}33\%$

E$.13\mathrm{.}86\%$

F$.14\mathrm{.}43\%$

G$.15\mathrm{.}06\%$

H$.15\mathrm{.}73\%$